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Center for
Social Innovation

Center for Social Innovation

Social Entrepreneurship

d.light I: Securing Early Funding

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Edward Sheen
Published: 2012
[photo - d.light]

d.light design is a for-profit social enterprise whose purpose is to create new freedoms for customers without access to reliable power so they can enjoy a brighter future. The company designs, manufactures, and distributes solar light and power products throughout the developing world. 

When the d.light co-founders were first starting out as a student team at Stanford University, they needed a funding strategy to support the continued development of their product concept. They raised their first $10,000 from small donors, principally family, friends, and a church cofounder Ned Tozun was attending. Cofounder Sam Goldman and Tozun also secured some financial support from Stanford’s Hasso Plattner Institute of Design and the GSB’s Public Management Program. These funds financed plane tickets for a return trip to Myanmar, additional field research, and further prototyping. However, it did not take long for d.light to require substantially more funding in order to grow. This mini-case study explores how the team tackled its early fund raising challenge.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings. 

Acknowledgements: We would like to thank Ned Tozun, Sam Goldman, and Erica Estrada of d.light for their participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Courtesy of d.light design

Diagnostics for the Real World II: Raising Funds for a Niche Solution

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Stacey McCutcheon
Published: 2012
[photo - DRW]

Diagnostics for the Real World (DRW), a for-profit spinout from the Diagnostics Development Unit at the University of Cambridge, is focused on manufacturing and commercializing technologies created at the university that can help address the unmet diagnostic needs of patients in developing countries. DRW’s first product was a reliable, low-cost Chlamydia Rapid Test (CRT) that made it feasible to conduct field-based chlamydia screening in the remote, resource-poor settings. Even more importantly, the new test enabled healthcare providers to test and treat patients in a single interaction rather than having to send samples to a central laboratory and get patients to return for their results and treatment options.

As Lee and her team worked on the product, they discovered that although chlamydia was a significant global health concern, it was not necessarily a top priority for the international nongovernmental organizations and health authorities that might provide funding or become the early, high-volume customers of the CRT. Moreover, without such organizations raising awareness or advocating for expanded chlamydia screening, there was no ready-made market or large-scale demand for the CRT in developing countries. DRW would have to undertake the daunting and expensive proposition of creating the market for a test that was considered something of a niche solution. To raise the money necessary to tackle this challenge, DRW needed a funding strategy that would support its focus on reaching patients and healthcare providers in developing countries. This mini-case study describes the multi-source funding strategy DRW devised to support its operation without losing sight of its mission.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings. 

Acknowledgements: We would like to thank Helen Lee of Diagnostics for the Real World for her participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Courtesy of Diagnostics for the Real World

PSI I: Taking a Service Model to Scale

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Stacey McCutcheon
Published: 2013
[photo - PSI]

Population Services International (PSI) was founded in 1970 as a nonprofit organization focused on improving reproductive health in developing countries using commercial marketing strategies. Over the years, PSI broadened its mission to address family planning, child and maternal health, and HIV and AIDS prevention, screening, and treatment.

As part of ongoing efforts to provide critical health services in developing countries, PSI sought to address the high unmet demand for family planning in Pakistan. Based on the organization’s earlier work in Pakistan, PSI knew that the majority of low-income women sought healthcare services from the private sector. Yet, despite being better equipped than public healthcare facilities, these private providers were generally not delivering family planning services. PSI learned that the financial incentives were low and that few providers actually had the necessary training and skills to counsel clients, perform IUD insertions, or prescribe pills or injectables. As a major NGO with a wealth of accumulated experience and significant resources at its disposal, PSI had the knowledge and ability to provide training to physicians. However, in order to educate enough providers to make a meaningful difference in a country with a population of more than 176 million, it would need to scale its training program quickly.

This required devising a compelling business model with incentives to motivate qualified providers to participate. The second challenge to successfully achieving scale would be raising the awareness and visibility of the trained providers so that Pakistani women could find them. This mini-case study describes how PSI devised and implemented a social franchising model to rapidly address these needs and achieve scale in the target communities. 

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank Julie McBride, Nikki Charman, and Regina Moore of PSI for their participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Greenstar, courtesy of PSI

PATH III: Addressing Affordability Issues

Academic Case Study by:
Stefanos Zenios, Lyn Denend
Published: 2013
[photo - PATH]

In late 2006, the PATH Safe Water Project received a $17 million grant from the global development unit of the Bill and Melinda Gates Foundation. Its purpose was to evaluate how market-based approaches could help accelerate the widespread adoption and sustained use of household water treatment and safe storage (HWTS) products among the world’s poor. Traditionally, this sector had been dominated by government and philanthropic solutions. Through a portfolio of field-based pilots, PATH intended to experiment with different commercial models for addressing this dire need.

One key factor to consider in constructing its pilot studies was the affordability of HWTS products. To reach people at the base of the socio-economic pyramid, organizations often heavily (or completely) subsidized products. However, through market research and some preliminary pilots, the PATH team uncovered detrimental effects of giveaways, particularly when they occurred without a long-term plan for supporting real behavior change in the community. The team was committed to finding other alternatives for addressing the affordability of safe water products. This mini-case study describes PATH’s efforts to use consumer financing as a mechanism for making HWTS products and supplies more accessible to its target market.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank Tim Elliott and the PATH Safe Water Project team for their participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Satvir Malhotr, courtesy of PATH

Mulago Foundation III: Choosing a Legal (and Capital) Structure

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Amy Lockwood, Stacey McCutcheon
Published: 2013
[photo - Mulago Foundation]

The Mulago Foundation is a private foundation focused on the prospect of creating a better life for the world’s poor. Concentrated in rural settings in developing countries, the Foundation’s work is in four areas that contribute to this overarching goal — livelihoods, health, education, and conservation. The Mulago team looks for investment opportunities in promising products and services that address these high-priority problems. When it comes to health, the organization is particularly committed to improvements affecting the lives of mothers and children.

In evaluating potential investments, the Mulago Foundation has observed how many global health innovators grapple with the choice between establishing their organizations as nonprofit or for-profit entities. One of the key implications of this decision is that it determines what sources of capital their organizations can tap into to fund their work. Nonprofits typically rely on donations from individuals, foundations, or corporations, often in the form of grants, which are generally given in anticipation of some "social return on capital.” In contrast, for-profit organizations commonly raise money from commercial investors (angels, venture capitalists, and impact investors) in exchange for equity in the organization. These investors expect a more traditional return on their money in the form of an eventual “exit” through which they will recoup many multiples over the original investment amount. Because many mission-driven global health innovators are creating social businesses that will have a revenue stream, deciding between these options can be a difficult choice with no “right” answer. This mini-case study provides insights based on the Mulago Foundation’s experience in the global health field and raises issues that innovators should consider as they evaluate their legal and capital structure options. 

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank Laura Hattendorf of the Mulago Foundation for her participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Courtesy of the Mulago Foundation

KickStart I: Delivering Enduring Solutions

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Edward Sheen
Published: 2012
[photo - KickStart]

Having observed too many development projects that appeared successful at first, but then failed as soon as the development agency moved on, Martin Fisher and Nick Moon felt strongly about taking a different approach. They believed that the root problem was lack of ownership and accountability, and they became convinced that individual ownership was the most promising strategy for alleviating poverty. Fisher and Moon founded KickStart to design tools that would enable Africa’s poor to launch and sustain their own profitable businesses. The organization’s first product was a line of manually operated irrigation pumps — branded “MoneyMaker Pumps” — that would help subsistence farmers transform their farms into profitable family businesses. The KickStart team believed that to be sustainable, its products had to be affordable and enable farmers to realize return on their investment within a relatively short period. This mini-case study explores this approach and how KickStart structures its business to provide enduring solutions.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Provided by KickStart International

The JaipurKnee Project II: Scaling up the Business

Academic Case Study by:
Stefanos Zenios, Lyn Denend
Published: 2012
[photo - JaipurKnee]

When a team at Stanford University accepted a challenge to design a low-cost prosthetic knee joint that could be produced locally for use in the JaipurFoot Organization’s clinics across India, the students thoroughly researched the problem, including the limitations of the existing knee joints the clinics were using. Over time, they created an innovative knee joint that met the unique needs of developing world amputees, which they called the JaipurKnee.

By late 2011, the JaipurFoot Organization had fitted 3,000 patients with the JaipurKnee joint in its clinics across India. Given its charitable mission, the JaipurFoot Organization had provided the JaipurKnees and the procedures at no cost to the patients. It locally manufactured the joints in its machine shops to keep its dependence on outside partners to a minimum and to directly control the inventory it needed. While Sadler and his teammates viewed their early experience with the JaipurFoot Organization as incredibly valuable, the team decided that it wanted to make its low-cost knee joint available to amputees beyond the Jaipur clinics in India. Unfortunately, they discovered significant market barriers. The total addressable market of 30 million amputees in countries around the world sounded like a lot, but the majority of these individuals are extremely poor, located in remote areas, and difficult to reach using current distribution channels. There were no well-established channels for reaching the millions of amputees who could benefit from the product, primarily because they were served by thousands of small, scattered clinics. This mini-case study describes how the JaipurKnee team developed a strategy to access its target market and scale up its business.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank Joel Sadler, Vin Narayan, and Krista Donaldson of D-Rev for their participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: ReMotion Designs

Impact Review: Sustaining a Good Idea Without a Standalone Business Model

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Julie Manriquez
Published: 2012
[photo - Impact Review]

While enrolled in a course focused on entrepreneurship, a team of Stanford students set out to create a platform for developing-world healthcare providers that would facilitate improved information sharing about high-impact, affordable solutions in the maternal and infant health space. The result was Impact Review, an online knowledge-base with a user rating system to aid the target audience in making more informed purchasing decisions based on user-generated commentary. 

When the team members graduated from Stanford, they had to determine what was next for Impact Review. They considered whether Impact Review could become a sustainable (although socially-minded) business. The primary model they explored was to generate revenue by posting advertisements on the site. However, in order to appeal to advertisers, the site would need to generate a high volume of regular traffic. Attracting and retaining such a large number of visitors during the company’s early stages did not seem feasible. They also contemplated the idea of establishing Impact Review as nonprofit and using donations to underwrite the organization’s ongoing operations. However, because all four teammates had accepted full-time jobs upon graduation, they worried about their ability to raise adequate contributions over the long term. Another option was to find one or more established entities that could benefit from Impact Review’s technology and get them interested in acquiring the technology. Not only would this ensure that the mission of Impact Review was carried forward, but it could help the platform take a giant leap forward if it was acquired by a company with a large established base of users in the target market. This mini-case study describes how the Impact Review team explored its options and the solution it developed to ensure the sustainability of the technology.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank Nupur Srivastava for her participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Courtesy of Impact Review

IDRI: Neglected Disease R&D with a Nonprofit Model

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Stacey McCutcheon
Published: 2012
[photo - IDRI]

The Infectious Disease Research Institute (IDRI) was founded by immunologist Steve Reed in 1993 as a nonprofit global health research center dedicated to applying advances in immunology to the development of products to prevent, detect, and treat neglected diseases. The institute was distinguished by its emphasis on the practical end goal of getting its products to market. To accomplish this, IDRI drew on the distinct competencies of diverse collaboration partners, including for-profit life science companies, research centers, universities, government organizations, and nongovernmental organizations (NGOs). Under the leadership of CEO H. Stewart Parker, IDRI was focused on eradicating tuberculosis, leishmaniasis, leprosy, malaria and Chagas disease, which together killed more than six million people each year.

To continue realizing positive results in the neglected disease space, IDRI needed a substantial, ongoing stream of funding. However, as a nonprofit, the organization could not tap into traditional funding sources available to private pharmaceutical firms, such as venture capital. IDRI generally relied on grants, but found that the funds were typically designated for a particular development program and had specific underlying rules governing their use. Accordingly, most grant support could not be used to develop IDRI’s infrastructure or to explore new projects that might enhance current research platforms. These funding constraints made sustaining the company challenging and limited its strategic growth. IDRI needed to generate additional revenue streams that would allow its management team more freedom in allocating funds to strategic, forward-looking activities. This mini-case study describes how Reed devised a model to create for-profit development arms to commercialize select IDRI vaccine technologies that had first-world applications, and thus significant profit potential, to help continue funding IDRI’s larger portfolio of projects.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank H. Stewart Parker and Erik Iverson of IDRI for their participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Courtesy of IDRI

Gradian I: Spinning Out a Commercial Entity from a Nonprofit Foundation

Academic Case Study by:
Stefanos Zenios, Lyn Denend, Julie Manriquez
Published: 2012
[photo - Gradian]

After observing too many unnecessary injuries and deaths caused by surgeries that were interrupted or canceled due to the unavailability of anesthesia, Dr. Paul Fenton designed a device called the Universal Anaesthesia Machine (UAM) that could deliver safe, reliable anesthesia even in the midst of a power outage. Fenton began using the prototype in his hospital in Malawi. When he saw how well the device performed in this environment, he sought to expand production so that other health facilities could benefit from the device. Unfortunately, Fenton was unable to convince investors to provide funding so he could further develop his innovation. He was also unsuccessful in identifying a buyer or licensee to bring the idea forward. At the time, those he spoke with were either hesitant to get involved in a business based in Africa, or they did not perceive an anesthesia machine targeted at low-resource healthcare providers to be commercially viable. Fenton would have to find another way to fund further development of the UAM.

This mini-case study describes how Fenton ultimately entered into an agreement with the Nick Simons Foundation to create Gradian Health Systems, which operates as a nonprofit but uses a commercial approach to sell the UAM at its manufacturing cost so production and dissemination of the device will become self-sustaining and widely scalable within several years.

[Read Case]

This story is part of the Global Health Innovation Insight Series developed at Stanford University to shed light on the challenges that global health innovators face as they seek to develop and implement new products and services that address needs in resource-constrained settings.  

Acknowledgements: We would like to thank Erica Frenkel of Gradian for her participation. This research was supported by the National Institutes of Health grant 1 RC4 TW008781-01.

Photo credit: Courtesy of Gradian Health Systems

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